RBA Leaves Interest Rate Unchanged

At its meeting on April 5, the Board of the Reserve Bank of Australia decided to leave the cash rate unchanged at 4.75 per cent.

Statement by Glenn Stevens, Governor: Monetary Policy Decision

The global economy is continuing its expansion, led by very strong growth in the Asian region. The recent disaster in Japan will have a noticeable effect on Japanese production in the near term, although the impact on the broader Asian region is expected to be limited. Commodity prices, including oil prices, have risen over recent months, pushing up measures of consumer price inflation in many countries. A number of countries have been moving to tighten their monetary policy settings. Overall, though, financial conditions for the global economy remain accommodative.

Australia's terms of trade are at their highest level since the early 1950s and national income is growing strongly. Private investment is picking up, mainly in the resources sector, in response to high levels of commodity prices. In the household sector thus far, in contrast, there continues to be caution in spending and borrowing, and a higher rate of saving out of current income. The natural disasters over the summer have reduced output and the resumption of coal production in flooded mines is taking longer than initially expected. Production levels should, however, recover over the months ahead, and there will be a mild boost to demand from the rebuilding efforts as they get under way.

Asset values have generally been little changed over recent months and overall credit growth remains quite subdued, notwithstanding evidence of some greater willingness to lend. Business balance sheets generally are being strengthened, and the runâ€‘up in household leverage has abated.

Growth in employment has moderated over recent months and the unemployment rate has held steady at 5 per cent. Most leading indicators suggest further growth in employment, though most likely at a slower pace than in 2010. Reports of skills shortages remain confined, at this point, to the resources and related sectors. After the significant decline in 2009, growth in wages has returned to rates seen prior to the downturn.

Inflation is consistent with the medium-term objective of monetary policy, having declined significantly from its peak in 2008. These moderate outcomes are being assisted by the high level of the exchange rate, the earlier decline in wages growth and strong competition in some key markets, which have worked to offset large rises in utilities prices. Production losses due to weather are temporarily raising prices for some agricultural produce, which will boost the March quarter CPI, but these prices should fall back later in the year. Overall, looking through these temporary effects, the Bank expects that inflation over the year ahead will continue to be consistent with the 2–3 per cent target.

At today's meeting, the Board judged that the current mildly restrictive stance of monetary policy remained appropriate in view of the general macroeconomic outlook.

TradingEconomics.com, RBA4/5/2011 9:34:40 AM

News

Australia Holds Cash Rate Steady at 1.5%
The Reserve Bank of Australia kept the cash rate at a record low of 1.5 percent at its April meeting, as widely expected, extending its record period of policy inaction for the 32nd consecutive month. Policymakers noted that the inflation rate remains low and stable and said that in the near term headline inflation is expected to fall due to lower oil prices earlier this year, while underlying inflation is projected to remain broadly stable. The Committee reiterated that it will continue to monitor developments and set monetary policy to support sustainable economic growth and achieve the inflation target over time.Published on 2019-04-02

Australia Leaves Monetary Policy Unchanged
The Reserve Bank of Australia kept the cash rate at a record low of 1.5 percent at its March meeting, as widely expected, extending its record period of policy inaction for 31st straight month. Policymakers said that the decision is consistent with sustainable growth in the economy and with achieving the inflation target over time. The Committee also noted that the inflation rate remains low and stable and it is expected to pick up gradually over the next couple of years, while the economy is projected to grow by around 3 percent in 2019 supported by business investment, spending on public infrastructure and employment. Policymakers added that uncertainty continued to be the outlook for household spending and the effect of fall housing prices in some cities. Published on 2019-03-05

Australia Holds Cash Rate at 1.5% for 30th Month
The Reserve Bank of Australia left the cash rate unchanged at a record low of 1.5 percent at its February meeting, as widely expected and extending its record period of policy inaction for 30th straight month, amid uncertainties around the outlook for household spending and the effect of falling housing prices in some cities.Published on 2019-02-05

Australia Holds Cash Rate at 1.5% in December
The Reserve Bank of Australia left the cash rate at a record low of 1.5 percent at its December meeting, as widely expected, extending its record period of policy inaction beyond two years, amid sluggishness in inflation and a slowdown in housing market.Published on 2018-12-04